Search This Blog


Most fall LA constitutional amendments deserve rejection

This election season, voters face unusually arcane yet important decisions on constitutional amendments. As always, this space is here to help provide clarity.

Most discussed on the October ballot, Amendment 1 does two things (which is a problem, as noted below). It caps the Millennium Trust Fund, with investment income from it continued to be used by a health care fund, education fund, and one for the Taylor Opportunity Program for Scholars, but any settlement funds incoming from the state’s agreement with tobacco manufacturers that currently goes to the MTF to flow to the TOPS fund. That pot would build up over the next three decades or so with the intent of making TOPS close to if not totally self-sustaining.

It also places in the Constitution a permanent four cent per cigarette tax that would flow into the health fund, there because a standalone bill was vetoed by Gov. Bobby Jindal and the Legislature failed to override with a two-thirds vote, but it could muster a majority to tack this onto the language above, that, as an amendment, is not subject to a veto. Unfortunately, this appears to violate Art. XIII Sec. 1 of the Constitution, which states that amendments must have a single purpose.

Bad enough that the state already has hundreds of dedications of revenue streams for particular purposes, over two dozen of which already reside in the Constitution that this would join, creating even less budgetary flexibility for funding on the basis of actual priority, but the questionable constitutionality of the proposal makes matters worse. Regardless of policy preferences regarding spending on TOPS or taxing cigarettes these reasons alone merit rejection of this one. Regrettably, it clearly would have been beneficial without the tax hitchhiker.

Amendment 2 offers much greater procedural and fiscal soundness. It makes mandatory redirection of recognized budgetary surpluses to pay down unfunded accrued liabilities in pension funds that constitutionally must go to zero by 2029, and thus merits passing.

But Amendment 3 would compound an existing problem. It would prevent appropriations from a fund set up to pay malpractice claims through state-sponsored insurance other than for that purpose. While the state has hundreds of dedicated funds, concerning almost every one of them, for many by a simple line item in an appropriation bill, they can have money removed for any reason with no requirement it must go to a certain purpose. Particularly egregiously in this instance, if hypothetical since the Legislature never has done this even though it has the authority, the funds in it come from the practitioners and not from taxpayers or users of services.

While this might appear as an issue of basic fairness, that the payers not have their money taken that may have to go to pay off claims, the state would have to meet these obligations anyway. Then it could be argued these premiums ought to remain uncollected in the hands of the providers. Which then leads to the question as to why the state is in this business in the first place? After all, plenty of nongovernment entities write malpractice insurance, and so enshrining this into the Constitution would make it even harder to get the state out of this activity. Thus, this one merits rejection if only to pave the way for the state to exit a business obviously adequately handled outside of it.

Perhaps most complex of all, Amendment 4 addresses a presumed hole in the bucket that is the “Rainy Day Fund.” Currently, when the Budget Stabilization Fund gets used under narrowly-specified budget situations, money flowing out of it must be repaid in the next fiscal year; the amendment would delay that a year and not force one BSF source, excess mineral revenues, to go back in entirety immediately into it but in smaller amounts, making those monies available for current and near-future fiscal year use. This increases flexibility that reduces fiscal pressures when more than one year of deficit projection occurs consecutively, but also makes it easier to tap into the BSF. This temptation needs resisting, and hence dictates a vote against this one.

Finally, Amendment 5 allows an exception enjoyed only in Orleans Parish to continue. Due to technicalities in current Constitutional wording related to census changes, the privilege to have a subsequent tax sale without a minimum price on property forfeited to the sheriff if its first offering does not result in a sale will go away without the amendment. The wording this time makes it a local amendment under the Constitution, needing a majority in Orleans in addition to one statewide to pass, but voters outside that parish should not cooperate because there is no reason why Orleans should enjoy this bonus.

And, there’s one item on the November ballot to consider. It prohibits the levy of a new tax or fee, upon the sale or transfer of immovable property, including documentary transaction taxes or fees, or any other tax or fee by any Louisiana government. It’s reasonable to vote in favor of this power to prevent governments reaching into pockets any time a sale or transfer occurs.

No comments: